Posts of: coingraph

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A man in Taiwan has been arrested over claims he mined millions of dollars’-worth of cryptos using stolen power.

According to a report from EBC Dongsen News on Wednesday, a man with the surname Yang is suspected of stealing electricity valued at over NT$100 million ($3.25 million) via his various business premises to mine bitcoin and ether, reaping around the same amount in mining profits.

Yang reportedly tapped the power supply at 17 stores in Taiwan for his illicit crypto mining operations. He would first rent an internet cafe or a toy store, then hire electricians to redesign the wiring so that the stolen electricity would not be metered, the report alleges.

Taiwan Power Company, the island’s state-owned utility provider, first discovered the operations after noticing an unstable power supply and launching an investigation. Yang was suspected and subsequently arrested by the police.

Wang Zhicheng, deputy head of the fourth brigade of Taiwan’s Criminal Investigation Bureau said in the article:

“The group recruited electricians who managed to break into the sealed meters in order to add in private lines to use electricity for free before that usage reaches the meters.”

Several such cases of mining using stolen power have emerged recently, as easy gains have proven too much of a temptation for some. Last month, two principals at a Chinese school got in hot water after stealing electricity from the institution to mine ether.

Back in June, police in the eastern Chinese province of Anhui arrested a man for allegedly stealing a significant amount of power for bitcoin and ether mining, after the local power grid company reported a spike in electricity use. And, in April, six individuals were arrested in China’s Tianjin region over claims they used 600 cryptocurrency miners to generate bitcoin with power taken from the local power grid.

According to a report by the South China Morning Post, a 24-year-old man is said to have tossed bank notes from the top of a skyscraper in Hong Kong, triggering agitation from passersby below.

The man, who was identified as Wong Ching Kit (with aliases such as “Mr. Coin” and “Coin Master”) is the owner of Coin’s Group and Epoch Cryptocurrency, a Facebook page that provides promotions for cryptocurrencies and miners. Kit is said to be a crypto enthusiast who made a large percentage of his fortune in last year’s cryptocurrency boom.

A Facebook Live Video which captured the occurrence showed the crowd rushing to catch HK$100 ($13) notes as they rained down from a building in the Fuk Wa neighborhood, one of the countries most impoverished areas. Kit is said to have been raising awareness for an upcoming event, choosing to take a somewhat unconventional approach to market.

While he was tossing the bills from the top of the building, the video recorded Kit telling bystanders:

“Today, December 15, is FCC’s big day in announcing the trading race. I hope everyone here will pay attention to this important event… [I] don’t know whether any of you will believe money can fall from the sky.”

Although it still remains unclear who- or what- he referred to as the FCC in his declaration, a Facebook video was released shortly after the stunt where he declared that he was similar to the fictional character Robin Hood, telling anyone who cares to listen that he was “robbing the rich to give to the poor.”. The “Coin Master” also claimed that he felt it was his responsibility to teach the world about Bitcoin.

Image from the Facebook video.

His “charitable” action triggered a mass reaction, as passersby began to scamper in a bid to catch the bills that were falling from the air.

The police claimed that he was arrested on charges of “disorderly conduct in a public place,” and they have also urged members of the public who were beneficiaries of his lawlessness to return the bills to where they got them. Luk Wai-hung, a local attorney, argued that while his motives for raising advertisement were understandable, his approach was the reason why he was arrested.

He said, “How did he do his promotion? He wanted to create chaos to do it.” He also added that the maximum penalty for his offense is a 12-month prison term and a fine of HK$5,000. Innocent bystanders at the location attested to the total amount of money that was thrown away could be millions, although the police reported that they were only able to recover HK$5,000 (the equivalent of $639) from the streets.

Sky News, a British TV station and mainstream media outlet, reported that investors lost homes as the Bitcoin price crashed. But, the same argument can be applied to the stock market, real estate, and every other major market.

The report claimed that investors put up their homes as collateral to receive loans and invest in Bitcoin. As the price of Bitcoin dropped, their homes were taken away along with their assets.

The report read:

Married men accessed equity through their family homes, and often – whether because they felt they needed to act quickly to make the most money, or because they feared that their investment would be criticised by their spouses – did so without informing their families, only to see the value of their assets evaporate, followed by their homes.

Bad Investment Method, Not Exclusive to Bitcoin

Crypto assets like Bitcoin (BTC) and Ethereum (ETH) are still at their infancy and are a part of an emerging asset class.

In February, Vitalik Buterin, the co-founder of Ethereum, said that cryptocurrencies are a hyper-volatile asset class and it is not an intelligent investment decision to allocate more than an amount that can be lost, as cryptocurrencies could drop near-zero in a short period of time.

“Reminder: cryptocurrencies are still a new and hyper-volatile asset class, and could drop to near-zero at any time. Don’t put in more money than you can afford to lose. If you’re trying to figure out where to store your life savings, traditional assets are still your safest bet,” Buterin said at the time.

Bitcoin Price (Blue) vs. S&P 500 (Red) | Year-to-Date Chart

The phrases “the rich get richer” and “money earns money” refer to the ability of the wealthy to hold on to risky assets and survive bear markets without liquidating their assets. On the contrary, investors that invest more than they can afford to lose in a highly volatile asset class but need the money to cover short-term expenses have no other choice but to liquidate their assets and obtain cash.

In the aftermath of the 2008 financial crisis, which affected the economy of the United States throughout the following years, the suicide rate of Europe and the Americas surged. Investors, especially retail or individual investors, who lost money in the stock market found it difficult to deal with anxiety, depression, and high levels of stress acquired from previous recessions.

Wealthy investors that had not cashed out of real estate properties and assets in the stock market throughout 2008, however, recorded no losses because they were able to wait out the bear market.

Don’t Invest More Than an Amount That Can be Lost

Investments in hyper-volatile assets without necessary risk management which publications have focused on when reporting about Bitcoin throughout the 2018 bear market are not exclusive to cryptocurrencies.

Many investors in the stock market and real estate often rack up debt to engage in high-risk investments and deals without proper risk management, which in most cases lead to full-blown bankruptcies.

When investing, especially in emerging asset classes, it is of the utmost importance for investors to weigh the risks involved in the trade and expect to survive a long-lasting bear market if it arrives.

The former CEO of defunct bitcoin exchange Mt Gox has maintained his innocence during the closing arguments of his trial, Japanese public broadcaster NHK reported.

The France-born Mark Karpeles is on trial in Tokyo on charges of embezzling approximately US$3.1 million and data manipulation while heading the fallen bitcoin exchange.

During the closing arguments, Karpeles also offered his apologies over his failure to prevent the loss of 850,000 bitcoins, a fact which ultimately led to the closure of what was once the largest bitcoin exchange in the world. The apologies are unlikely to mean much since in this particular instance he is not on trial for the loss of the bitcoins but rather his handling of client funds.

The trial which has been taking place at the Tokyo District Court started last year in July. A verdict is expected on March 15, 2019.

A Decade in Prison?

The former CEO of defunct bitcoin exchange Mt Gox, Mark Karpeles, faces up to a decade in prison for embezzlement.

Earlier this month, prosecutors indicated that they were seeking a 10-year prison sentence for the Mt Gox ex-CEO, as CCN reported.

Previously Karpeles has argued that the funds he is alleged to have embezzled were a temporary loan. Prosecutors, however, rubbished this claim saying that there was no paperwork to prove this line of argument.

At the start of the trial, Karpeles also insisted that the funds he is alleged to have embezzled were not really client funds but revenues generated by the cryptocurrency exchange. According to prosecutors, Karpeles used the embezzled funds to invest in a technology startup, purchase luxury items, and even hire prostitutes.

Civil Rehabilitation Proceedings

The trial is coming to a close at a time when plans to compensate investors who lost their digital assets following the hacking of Mt Gox is underway. In September the defunct bitcoin exchange opened its online claim filing system to corporate creditors, and this was about a month after Mt Gox had done the same for retail investors. The filing process ended in late October, and the trustee is expected to submit to the courts a list of rejected and approved claims by January 24 next year.

At the time of the hacking, the price of one bitcoin was approximately US$480. With Karpeles having later found around 200,000 bitcoins that had been kept in cold storage, this would have been enough to compensate all the investors had the exchange remained in bankruptcy and even left the ex-CEO millions of dollars richer at current prices.

However, a Japanese court ruled mid this year that the exchange could exit bankruptcy and start civil rehabilitation proceedings paving the way for creditors to be compensated in bitcoin as opposed to cash.

Joseph Lubin, co-founder of major cryptocurrency Ethereum (ETH), declared that he is “calling the cryptobottom of 2018” in a tweet Dec. 21.

According to Lubin, the crypto market’s bottom “is marked by an epic amount of fear, uncertainty, and doubt,” specifically from industry media and social commentators, which he refers to as “our friends in the 4th and crypto-5th estates.”

Continuing in a Twitter thread, the founder of Ethereum blockchain-focused software firm ConsenSys then evidently addressed his firms recently reported major layoffs:

“ConsenSys remains healthy and is engaging in a rebalancing of priorities and activities which started about nine months ago.”

He stated that Consensys continues investing in projects — in its role as a blockchain tech incubator and venture firm — and hiring for internal projects that “remain core to our forward looking-business.”

Concluding, Lubin reiterated his optimism about the future of ConsenSys and Ethereum, stating:

“The sky is not falling. From my perspective the future looks very bright. […] Peaking [sic] into 2019, if you could see the landscape through my eyes, you’d have to wear shades.”

Reports surfaced this week — citing sources familiar with the matter — that ConsenSys is spinning out startups it previously backed, some of them without financial support. The sources reported that the number of employees to be laid off could be anywhere between 50 and 60 percent of ConsenSys’ 1,200 person workforce.

This past week, Cointelegraph reported that in comparison to more significant job cuts in various industries globally, the current slump in the cryptocurrency markets and ensuring job cuts in associated companies seem relatively benign.

In September, Ethereum’s other co-founder Vitalik Buterin had pointed out that there is no chance that the cryptocurrency and blockchain space will see “1,000-times growth” again.

Sunday, Dec. 23 — all of the top 20 cryptocurrencies are seeing moderate gains, with Bitcoin’s (BTC) price going above $4,000 again, according to CoinMarketCap data.

Market visualization from Coin360

At press time, Bitcoin is up nearly four percent on the day, trading at $4,050. Looking at its weekly chart, the current price is lower than the Friday’s high of almost $4,200; but the cryptocurrency is still trading significantly up from $3,294 — the point at which it started this week.

Bitcoin 7-day price chart. Source: CoinMarketCap

Ripple (XRP) — the second largest cryptocurrency by market capitalization — has gained over five percent on the day, trading at $0.374 as of press time.

On the weekly chart, the current price is significantly higher than $0.292, the price at which XRP started the week. However, the current price is slightly lower than the high of $0.389 reached on Wednesday.

Ripple 7-day price chart. Source: CoinMarketCap

Ethereum (ETH) remains the third largest cryptocurrency by market cap, seeing a 15 percent value increase over the last 24 hours. At press time, ETH is trading at $128, having started the day at $111 and hitting an intra-day high of $133.

On the weekly chart, the current price is notably higher than $87, which was the value of ETH on Monday.

Ethereum 7-day chart. Source: CoinMarketCap

Among the top 20 cryptocurrencies, some are reporting more significant growth rates. Namely, NEO has gained 12 percent, and EOS is also up nearly 12 percent. Cardano (ADA), Litecoin (LTC), IOTA and Ethereum Classic (ETC) are all up almost 10 percent.

The combined market capitalization of all cryptocurrencies has surged to over $135 billion at press time. This places the current market cap near its weekly high of over $137 billion, after having started the week at just $104 billion.

As Cointelegraph reported recently, co-founder of Ethereum, Joseph Lubin, declared on Twitter that he is “calling the cryptobottom of 2018.” He further added that from his perspective “the future looks very bright.”

Earlier this week, two United States congressmen introduced a bipartisan bill titled “Token Taxonomy Act,” which proposes to exempt crypto assets from being considered securities.

A team that includes representatives from the Bank of Israel has issued a formal request for information about Distributed Ledger Technology (DLT), published on its website Dec. 18.

The request — the goal of which is, as per the title, the “Regulatory Coordination of Virtual Assets”— states that “the regulators of the Israeli financial system believe that there is room to renew and strengthen cooperation and coordination among all regulators and the public” regarding DLT.

Besides the country’s central bank, the team reportedly includes representatives from the country’s Securities Authority, the Ministries of Finance and Justice, the Tax Authority, the Israel Money Laundering and Terror Financing Prohibition Authority and various other local regulatory bodies.

The document asks for information pertaining to barriers to the development of the local DLT industry. The text inquires explicitly about problems encountered by local DLT companies, fundraisers, investors and consumers dealing with virtual assets as examples.

Moreover, the request inquires about the risks inherent in the use of virtual assets and the opportunities of DLT in the finance industry. Lastly, the statement also asks how DLT can help address issues regarding Anti-Money Laundering (AML) and terrorism financing.

As per the statement, interested parties are invited to submit relevant information until Dec. 31, 2018.

As Cointelegraph reported at the beginning of November, an Israeli study group exploring digital currency options has recommended that the country’s central bank not issue its own cryptocurrency.

At the beginning of December, Ehud Barak, a former Israeli Prime Minister, compared digital currencies to Ponzi schemes. He reportedly stated that “he would never invest” in crypto as “Bitcoin and cryptocurrencies [are] a Ponzi scheme.”

According to the article, the zone — which officially opened Dec. 20 — has a total area of 120 square kilometers and already hosts the headquarters of over 20 companies. The zone and its administration will reportedly offer the companies project financing, office space and policy guidelines, and will overall “promote the transformation and application of technological achievements.”

CSDN notes that the Guangdong financial high-tech zone will “focus on the major needs and major pain points of the financial [industries] encouraging blockchain and other technologies in finance, manufacturing, trade.” The zone will begin with fostering pilot projects, and then will move forward in order to “culvative a group of blockchain financial technology enterprises and innovation teams.”

In November, the “Guangdong, Hong Kong, and Macao Dawan District Blockchain Alliance” had been established to promote innovation and sustain the development of blockchain tech. CSDN mentions the three districts as areas for expanding the use of the technology.

China, which has long been cracking down on cryptocurrency by banning both domestic and foreign exchanges, and even crypto-related social accounts, seems to be heavily investing in blockchain technology. As Cointelegraph reported this week, a media copyright protection alliance has been created in Beijing to provide copyright protection employing blockchain technology.

Also in December, Shenzhen, a major city in the Guangdong Province and home to the first economic special zone in China, announced that it will use blockchain technology for electronic tax invoices.

American global telecommunications conglomerate Comcast aims to make its blockchain initiative Blockgraph commercially available in 2019, according to a press release published Dec. 21.

“Comcast is currently working with NBCUniversal to test Blockgraph’s capabilities with plans of incorporating it into its addressable offering in early 2019,” states the release.

Comcast is a global media company founded in 2001, that provides cable television, Internet and telecoms services. Comcast is purportedly the second largest broadcasting company in the world in terms of revenue and largest TV company in the United States. The company’s consolidated revenue for the third quarter of 2018 was $22.1 billion.

According to Comcast, its Cable Advertising division initiated the next phase of its Blockgraph platform — a product designed to secure personal data and share information — which will subsequently lead to the project’s launch in 2019. Comcast is working on the project with other industry players like mass media conglomerate Viacom and advertising sales firm Spectrum Reach, among others.

Blockgraph will purportedly provide an “identity layer” for the TV industry, by means of which media companies can share non-identifiable audience data. The peer-to-peer platform aims to improve the efficiency and effectiveness of TV marketing and advertising. President of Spectrum Reach David Kline commented:

“It’s imperative that the use of data prioritizes the privacy of consumers’ personal information. Blockgraph’s technology offers enhanced security and privacy protections by allowing all players within the TV ecosystem to directly share insights derived from anonymized and aggregated information.”

Comcast has been maligned in the American media for being a de facto monopoly in many regions, and has even been called the “Worst Company in America” by some publications. Earlier today, Minnesota Attorney General Lori Swanson filed a lawsuit against Comcast Corporation/Xfinity, alleging that it has charged customers more than it promised, in addition to charging for unordered services and products.

In addition to its own products, Comcast has supported other blockchain development projects. In March, New York-based blockchain startup Blockdaemon closed a $3 million venture capital seed round led by the telecoms giant. The funds were set to be used to “enhance infrastructure options, and to help customers run multi-tenant networks across all sorts of different blockchains.”

United States lawmakers have introduced a bill to levy further sanctions on Iranian financial institutions and the development and use of the national digital currency. HR 7321 was introduced in the House of Representatives by Rep. Mike Gallagher on Dec. 17.

In a bid to combat money laundering and terrorism-related activities, the “Blocking Iran Illicit Finance Act” calls for sanctions on the Iranian financial sector and on the development and use of the national cryptocurrency.

The act specifically prohibits transactions, financing or other dealings related to an Iranian digital currency, and would also introduce sanctions on foreign individuals engaged in the sale, supply, holding or transfer of the digital currency.

The act also calls for a report to Congress on the government of Iran’s progress in developing a sovereign digital currency. A corresponding bill was introduced in the Senate by former presidential hopeful Sen. Ted Cruz on Dec. 13.

The U.S. government introduced sanctions against Iran over its nuclear program in 2005, while the U.S. Senate and House of Representatives passed the Comprehensive Iran Sanctions, Accountability, and Divestment Act in 2010. The sanctions affected the financial sector of the country, barring financial institutions of Iran from directly accessing the U.S. financial system.

The sanctions were lifted in 2015 after the country agreed to dial down its nuclear program to meet standards set out by International Atomic Energy Agency in the Joint Comprehensive Plan of Action (JCPOA).

However, in May 2018, U.S. President Donald Trump announced that America would withdraw from the JCPOA that was brokered under his predecessor President Barack Obama. Sanctions were subsequently reintroduced.

Many Iranians have turn to cryptocurrency as a way to skirt sanctions. In May, Mohammad Reza Pourebrahimi, the head of the Iranian Parliamentary Commission for Economic Affairs, referred to cryptocurrencies as a promising way for Iran to avoid U.S. dollar transactions, as well as a possibly replace the SWIFT interbank payment system.

As Cointelegraph reported earlier in December, Iranians are turning to Bitcoin (BTC) mining due to economic difficulties. Despite the recent crash in crypto markets and fluctuations in the national rial currency caused by sanctions, Iranian people are still reportedly managing to gain profits from mining Bitcoin.